How Can Product Companies Grow in WordPress Right Now?

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Sandra: Hi everyone, and welcome to another episode of Greyd Conversations. A few weeks ago, Elementor, one of the biggest players in the WordPress industry, announced a layoff of 30% of their staff. They framed it as a reset of a healthy company. But let’s honestly look at what’s happening underneath the press release. It means one of the most important, most dominant and most deeply entrenched companies in this entire ecosystem, profitable by their own admission, still had to cut 30% of its people, mainly because of AI. It’s not just a reset, it’s a company getting caught out by a shift it didn’t move fast enough on. Now, if this is happening to Elementor, what does this mean for everyone else building products in WordPress? That’s what we’re here to dig into today. And I’ve got three people who are living this from quite different angles. So I’m super excited. We have Katie Keith here, founder of Barn2, 1.6 million a year in WordPress plugins. And right now, in the middle of a deliberate shift to expanding beyond WordPress. Aurelio Volle, we just found out he’s the first returning guest on this podcast. So welcome back, Aurelio, founder of WP Umbrella, bootstrapped for nearly 2 million ARR. And he’s done that by going deeper into a specific niche rather than wider. And both of them also have in common that they are among the few people in the space who publish real numbers and share a lot of their successes, their thoughts and their challenges publicly. And last but not least, we have Matt Cromwell, who coaches WordPress founders through Roots & Fruit and also co-hosts WordPress Product Talk together with Katie. So they also heard the struggle from probably a dozen of founders and will be able to share some of their feedback and thoughts. So welcome all three of you. It’s a pleasure to have you. Let’s start with your gut reaction. When you saw the Elementor news a couple of weeks ago, what went through your heads?

Katie: Yeah, I was surprised because Elementor is just, they are thriving as far as anybody can see from outside. They have a ridiculous market share. Way more people seem to use them than the block editor, for example. It’s quite incredible how well they’ve done. They’ve never been super transparent about things like revenue. They’re very community focused in many ways, but in terms of their business and their revenue, they’re actually not transparent. And apparently that’s an intentional thing. So we don’t know what’s going on behind the scenes. So I find it difficult to know whether this reduction in the workforce is a response to decreasing revenue as a survival thing, or an opportunity to increase profits because of the opportunities which AI has brought. And reading the press release, I wasn’t super clear about that. Interested to hear what others think.

Sandra: Matt, what do you think?

Matt: Yeah, my experience is mostly through several different teams, GiveWP in particular and then working at Liquid Web through Stellar WP, and seeing different companies downsize over a period of time. Or sometimes they call it rightsizing, for different reasons, which sounds terrible when you’re one of the people that’s been offboarded in this rightsizing. But the truth is, companies will rightsize for a lot of different reasons and different motivations. I was surprised that it was 30%. I felt like that was very high and that there must be specific reasons why it was that high. You can rightsize at 10%, 15% instead, and it feels a lot less like a big impact. But the truth is, with big companies that have hundreds of employees, sometimes the hiring process itself just kind of gets on automatic and you end up hiring a lot of people, and it feels like growth. It feels like, hey, we have such a big team and we’re growing so well. And sometimes folks rightsize because they just hired too many people for the wrong reasons in the first place. So it sometimes is just a matter of cleaning up bad hiring practices. But that’s why I would think a 10% might account for that. And then other times, maybe they’re really trying to trim a lot in order to put additional new pressure on the people that stay to say, hey, AI should really be helping you produce a lot more work daily than it was before. And if it’s not, now it’s the time to figure that out. So these are all kind of strategic reasons. Not necessarily things that mean there’s a big, bad ecosystem thing happening. I think the only other one that stood out to me, and definitely interested to hear what Aurelio has to say, but is that it coincided a little bit with their launch of Stick Lite, which is a big AI platform that they’re putting some attention on right now as well. And I don’t know exactly what that means. Initially they launched it as a WordPress agnostic platform not related to WordPress at all. And then they suddenly said, well, actually, no, it has a lot of WordPress application too. So that this coincided with that also does seem a little bit interesting in my mind.

Sandra: Aurelio, what about you?

Aurelio: I don’t have any insight about what’s going on at Elementor. And I think it’s hard to actually have a good opinion on what’s going on. I mean, there is for sure some market correction after the last years, if we can call them like this, of Covid 19, where everybody wanted to have websites. And I don’t think we can take any learnings from this downsizing. What surprised me, though, is that Elementor, as Matt rightfully said, shipped a lot of new products. There is Elementor One, there is this new AI thing, they have tried to close the loop and have everything in-house. And you still need people, even if you have AI agents. So much AI in everything you do, you still need people to train the AI chatbot, to reduce the code, to do things like that. So it’s a bit surprising. My reading, but most of you guessed, would be that they’re aiming for full profit mode. That’s what I would say.

Sandra: Yeah. Thank you all for your thoughts on that. I think it’s not just Elementor that seems to be optimizing or struggling, or whatever it is in the end, we can’t know. But we hear that in a lot of conversations. We’ve all been to WordCamp Europe a couple of weeks ago and, Katie, you also posted a recap post about your experience there. You shared that while the atmosphere was overwhelmingly positive in general, underneath that you also spoke to a lot of product owners, and a lot of them told you that their new sales were down. Tell me a little bit about those conversations. What were people saying to you?

Katie: Yeah, I’ve been talking to a lot of product people because our own new sales started dropping exactly two years ago and have continued to drop. So I’ve been talking to a lot of product people. It’s absolutely not universal, as we will hear in a minute. But by talking to lots of people, I’ve been able to find some patterns as to who is the most vulnerable at the moment. Unfortunately, I think that my company falls into all of those patterns, which is unfortunate. The reasons I gathered from the people I spoke to is that if they have just started marketing or something like that, they can see growth. If you’re starting from nothing, you can still grow. Actually, a year ago I acquired half as a product, Setary in block editor, and we’ve doubled the sales. None of my established products that had already been marketing properly before that have grown, and yet Setary has doubled. So that fits into that. And also with other people I’ve met, if you are really, really dependent on organic SEO, then your sales are likely to be down a lot. We’re amazing in organic SEO, unfortunately, and we’ve done lots of other marketing channels, but that is the thing that got us to where we are. That is the thing which is increasingly struggling and is not effectively being replaced by AI. Also, the type of product is really important. So the people I’ve spoken to that tend to do quite small utility plugins typically are down more. A lot of bandwidth plugins, utility plugins, like adding specific features to WooCommerce, for example. They’re easier to replicate with AI, of course. Whereas if you have a big platform, even like Aurelio’s product, it’s fundamental to your infrastructure. That’s not something you’re just going to replace with AI. It’s a small thing that adds a little extra email field to WooCommerce or something, like some of my plugins, very easy to replace with AI. And then finally, it depends on what niche within WordPress you are, because some are growing and some aren’t. And most of my products are WooCommerce, which it’s very hard to get good data, but I think WooCommerce might be down more than WordPress as a whole. So there’s a lot of different things. It’s not just me. All the people I talk to in these different categories are saying similar things, but across the board, the majority seem to be down.

Sandra: Matt, is this something, you speak to a lot of founders and product owners, can you confirm this? I think the sentiment in general.

Matt: Yes, for sure. And I depend a ton on Katie’s transparency. So the things that she’s been sharing, I think are valid, for sure. And all of the things that she highlighted in terms of the risks or the reasons why some folks are down right now, I validate. Also the folks that are not down at the moment. There are plenty of platforms that are still growing. I haven’t talked with any except for, I’ve seen a little bit from Aurelio about WP Umbrella and how well they’re doing at the moment. Which is good. But I haven’t seen a lot that are actually really increasing really, really rapidly. But platforms that have more of a real moat and aren’t utilities do tend to still be doing well. Any of the products that are a lot closer to their customers’ revenue base are all still doing well as well. So think of like the GiveWPs, the Paid Memberships Pro, the folks who are helping their customers also make money, or are a tool that helps them make money in one way or another, like email platforms, tend to be doing okay overall. But not at leaps and bounds. They’re maybe seeing 5 or 6% growth, whereas in previous years they were hoping for ten or more. So growth definitely has slowed down. Not as a whole.

Sandra: There was also an interesting moment at WordCamp Europe that I personally found very surprising. I don’t remember who it was, but there was somebody on stage who asked a room to name 20 WordPress plugins, and people were generally struggling. And I think for an ecosystem with tens of thousands of plugins, it’s really a strange thing to witness. And this is probably not something that we can blame AI for. So do you think this is not just an AI product ecosystem problem, but also a general visibility or marketing issue that we’re looking at here?

Matt: There’s a lot of reasons why I think that happened. I think people being put under that kind of public pressure makes them always a little bit nervous and not able to perform at their best. But I think the easiest way to name that problem is honestly branding. I think it’s a branding problem. People have a lot of websites and they put a lot of plugins on all of their websites, and they very often will be like, oh, I have like 30 plugins I use all the time. They can’t remember the names of them because they don’t care. They don’t care about what the names of those plugins are. They’re just like, oh, I need this one for managing my users. I need this one for adding widgets. I need this other one for whatever, they have them all. They don’t care what they’re called. They just need that functionality. But people tend to remember Yoast. They tend to remember that because it’s a really good brand, despite whatever you might think about the actual colors and things like that, it tends to be a very strong brand. It’s honestly something that I feel like we nailed really, really well with GiveWP. Everybody knew that brand, whether they needed a donation plugin or not, because we were really good at brand. And you remember that plugin, and that’s the benefit of a brand, is remembering them whenever you need it in the future. But there’s so many of these other ones that they’re like, I want to pick on them a little bit, advanced custom fields. That’s not a brand. That’s a functionality. And you’re like, well, I need to add some custom fields to my site, I’ll just search for custom fields. Oh yeah, that’s what it’s called, advanced custom fields. It’s not a brand, it’s a functionality. So that’s my reason why I think folks struggle on that front.

Sandra: So do you think this is also a little bit a mismatch of where the marketing budget goes, because I remember that you recently said something about, that you think product founders in WordPress are putting too much budget into acquisition like ads, SEO, content and affiliate. And especially since this is all getting a lot harder and more expensive?

Matt: I don’t know that I said that. I think I might have said the opposite, honestly. I do think that, like Katie was saying, the game used to be organic. It used to be owned content marketing on your owned channels. And I think today it’s still a content marketing play, but not on your own channels. It’s on your unowned channels. You have to be able to get your content out to all the places where your audience is at all the time, and very often that does cost money. I personally think most brands are not spending enough on their paid acquisition, because they keep trying and failing at it. And it’s not because paid acquisition doesn’t work, it’s because they’re not good at it yet, and they just haven’t had the patience to really figure it out. So I would say probably the opposite. I think this is more of like, discovery happens out in the marketplace. That’s where people learn about products and plugins. And the more that you can get yourself out there the better.

Sandra: That actually resonates very well with what Emma Young has shared in the last episode, where she also stated, and I think she also mentioned that in her talk at WordCamp Europe, that I think it was 15% or something of AI visibility comes through your own website, and all the rest comes through all those other channels like affiliate partners, Reddit mentions and whatever. That is often not really considered in product people’s marketing, right?

Matt: Yeah. I mean, back in the day with GiveWP, we had an ad spend budget of 15% of revenue. That’s what we were doing previously. When we came on board to Stellar, we actually started implementing that across all the other brands as well. They were doing closer to 5%. We increased all of them up to 15. And then we started increasing the entire Stellar budget up to 17 and 18% of revenue. Because we saw the returns that we were getting, but it was only because we had really good ad buyers that knew what they were doing. And today, honestly, I really think a lot of brands, probably if they’re doing it well and right, could get up into 20% of revenue. In order to continue to grow and see the numbers that they want. But it gets harder and harder. You do have to see that return in order to justify that kind of spend.

Sandra: Okay. This is also something that you are considering. You’ve shared that you’ve been pretty successful in SEO in the past, and AI kind of just washed over that and destroyed channels that have worked so well for you in the past. Or is this part of your strategy, like reallocating the resources and marketing a little bit away from SEO and to other funnels like apps as well?

Katie: Yeah, that definitely needs to be part of the new strategy. First, it’s worth mentioning SEO is still our biggest source of sales by far, despite everything that’s happened. It’s just far smaller than it used to be. So that is still important. And a lot of what you do for SEO also helps with the AI side of things, but you do need to change direction slightly to make sure you’re thinking about AI. Even techniques like atomic sentences, answering the question right at the beginning of the article, things like that that help AI. They’re good for real users and SEO as well, but you need to have that AI in mind. I saw Emma Young talk as well about that. I actually mentioned that to Ellipsis, who were our marketing company until, well, six days ago. That’s a big change for us. And they said, hang on, that stat depends on the AI. Google AI Overviews, that stat does not apply to, they’re mostly looking at your website and your content, whereas other ones like ChatGPT, that’s where the 85% would come in. So it depends on the LLM basically. But clearly it’s important. Again, it’s always been important for SEO as well, that high authority sites outside of your own site are talking about and recommending and linking to your products. So that hasn’t changed either. We all need to be doing that. But the depressing thing is that however much you can get AIs to recommend you, I’m pretty sure that you’re not going to get your previous sales. So let’s imagine, first of all, you originally appeared at the top of Google for a particular key phrase or something. People click through to your website. They see your branding, how professional you are. They see your testimonials, your newsletter signup, your calls to action. They’re much more likely to convert than if AI recommended you, because AI would recommend you alongside other solutions. They might recommend you alongside solutions that have a terrible website, but the person never knows that they’re unprofessional and don’t have good credibility and trust factors, do they? Until they click through. And also AIs are equally likely to recommend you alongside non-plugin solutions like doing something in the block editor or whatever, or something maybe not even WordPress. They might recommend a SaaS or something instead. So however good we get at AI optimization, I don’t think it’s a solution for the lost revenue from SEO. Probably.

Sandra: Aurelio, we’re going to talk about how WP Umbrella is doing a little more in detail in a minute. But one question before that: as far as I know, you’re growing a lot through infrastructure partnerships, rather than ads or content, for example. WP Umbrella is now available on every Rocket.net account, and you’re also deeply integrated with Patchstack. That’s a slightly different distribution model than SEO or paid acquisition. How did you find the path, and do you think it’s replicable for other product companies?

Aurelio: So I think there is a bar on LinkedIn, because our main acquisition channel has been for four years SEO and word of mouth and organic. And distribution partnerships are very recent. And they are very important checks in what we are doing. And I think it’s important to clarify that, to come back on this topic because I think it’s important: we let the person who was doing our SEO go back in January or February, I guess. Now it’s automatically being done by AI agents. Yesterday I had an analysis of what’s going on on our websites, like what’s converting, what’s not working. Long story short, the issue is that, as a matter of fact, as a source of traffic coming from search, anxiety doesn’t mean that you shouldn’t do content and stuff like this. So it’s being picked up by LLMs. But SEO as it used to be is dead, and all we are getting from search engines is brand-related traffic. And we’re still advising you to do SEO. In my opinion, trying to do SEO is wrong, or it’s lack of clarity on this acquisition channel. That’s a very personal thing. And I’m saying that knowing that we were doing a very good job at SEO in the past, and that this was my favorite acquisition channel. When it comes to distribution partnerships, I would not advise anybody to do that. I think it’s a distraction. It takes so much time. I think we’ve been trying to do partnerships like this for the past three years, like go big or go home. We did two meaningful partnerships with two very singular companies. The first one is Patchstack, and they are super dynamic, super young. And we’re able to do something within a day with them that I think is very unique. And we have this in common in our DNA. And Rocket.net, but Rocket.net took so much time. And my advice, if we are talking about which product people are, is to ignore these, because those guys are going to ask you the AP feature, they are going to try to move you, run that, and you will end up taking that decision. And actually, it’s very healthy that you can only do these kinds of strategic partnerships when you are big enough. So you can say no if you think they’re asking you something you shouldn’t be doing. And actually, this is why it made so much sense with Rocket.net, because they didn’t try to have something like a walkaround, some custom development. They just came and said, hey, you have the best product. We don’t want to do that. Can you do that for us? And then we worked out the technicalities. But that would be my advice to almost everyone. Don’t waste. I have wasted so much time. And I have too many NDAs going on, so I cannot disclose names. But as a founder and CEO, I wasted so much time and energy trying to integrate fully very big WordPress people. And we spent time and at the very end, it didn’t happen. I even almost built a product of a competitor, so very many similarities. We almost built it till the moment where, oh, there is no financial agreement possible. And my advice is really: follow your vision, find where your people are, good feedback times, and eventually something might happen. Like it happened with Rocket.net.

Sandra: And I think that’s actually very valuable advice, especially for young companies, because I often have the impression that if they want to do partnerships, it’s to kind of fix their own sales. So they are not where they want to be sales-wise, and then the natural conclusion is like, yeah, let’s create some partnerships and use them as multipliers. And that just doesn’t work. If you haven’t succeeded in selling your product on your own, a partner is not going to do better than yourself. Probably. Matt, a different topic. A few weeks ago, you shared some thoughts on pricing psychology, especially in the WordPress freemium world. I got a quote here saying “in the WordPress freemium plugin space, it’s basically a cardinal sin to consider raising rates on existing subscribers. But the folks who complain probably aren’t really your ideal customers in the first place. So raise your rates with transparency and your business will get healthier.” I personally really enjoyed reading that. As you might know, we’ve been advocating for the need of pricing maturity in this ecosystem for a while, so I would love to hear a little bit more of your thoughts on that.

Matt: Yeah, I think it’s always important, and these types of recommendations, it gives really good strong caveats. Also, all the things that Katie has been highlighting about her business and her customer base, probably not ideal to raise their subscription rates. Honestly, they’re all at risk for not coming back no matter what. But when I was more speaking about some of these more platform products, especially the ones that have been around for ten plus years, sometimes they sold their early subscriptions at 39 bucks a year. I’ve seen some atrociously low pricing from ten years ago. And it’s amazing that they’ve been able to keep those customers this whole time. But the truth is, as a business and as a product, you’ve been pouring in so much value into your product over the last ten years, and you haven’t raised those rates for real reasons that I think are kind and good, but everything between a customer and a product, or a customer and a business, is also a relationship. And there’s both sides to the story. And it can get, honestly, at scale, to the point at which the customer becomes costly to the business in the long term. And more and more today, you really do want to be attracting customers where the benefit is at least mutual, if not maybe a little bit better for the business long term. Instead of the business taking on so much expense for the sake of these customers. The biggest thing I was trying to highlight there is that raising subscription rates is possible with the right amount of transparency, with the right amount of care, for the right reasons. And it would result in the long term of being a lot healthier for the business, which honestly, a healthier business is better for the customer long term as well. So I was really hoping to spark a little bit of conversation with that post, to hear folks say what they have and haven’t tried. I think the conversation that happened was more of like, why, why, why raise prices? And it wasn’t enough of the actual meat and potatoes yet. But if we can have that conversation, that’d be great. Why are you all thinking of, why is pricing maturity so important to Greyd at the moment? I’m actually curious about that.

Sandra: Yeah. What we think in general: when we entered the WordPress market, I think we were one of the first, at least publicly, to come up with a subscription-based pricing model. So at the beginning, all of our discussions were like, yeah, we’re not paying subscriptions, we’re not paying monthly. We want a lifetime license like we’re used to in WordPress. And from our point of view, from a financial perspective, lifetime licenses is just not something that is going to work in the long term, neither for the customer nor for the company. Because like I said, if the company is not healthy, in the end that won’t help the customer, because if the company stops being there, then they can’t use the product anymore either. That plus, I think you’ve hinted at it also in your answer, that there are a lot of products out there who offer tremendous value but are way underpriced, because we’re having a pricing policy in WordPress where everything has to be super cheap. And most of the companies try to go for the very low tier pricing target group. People are just used for so much being free and being super, super cheap that it’s actually quite hard to come in with products that, even if they provide a lot of value and save a ton of costs and gain you a lot of efficiency, this super cheap pricing policy makes it difficult for products with what we call mature pricing, which is completely normal in other industries. But in WordPress, it’s a little bit different.Yeah. I think there is a case for having really low prices, but that’s when you’re trying to target having millions of users. You can have a really low price thing if your strategy is lots of volume. But the truth is, so many products can’t achieve that kind of volume at all. So it’s much more ideal for them to raise their rates a bit, and then really know their customer really, really well to be able to target that customer and price according to the value that customer finds in your product. If you do that really well, then you’ll find that you probably provide a ton more value than you even realize you do. And raising the rates then becomes a no-brainer. I’ve loved having conversations with customers when I come into the conversation being like, oh, we’re thinking we’re going to put this at like 149 a year. And they’re like, really? We thought it was going to be like a thousand a year. And those conversations were always really eye-opening to me. Because it just shows the amount of value that we can provide to these users and the appetite that they have to be willing to pay for something that is that valuable for them.

Sandra: So what’s a really important part here is, like I said, knowing your customer and really targeting your ideal customer profile and not just anybody out there who might have an interest in your product.We’ve already hinted at it. While many industries in the industry are really struggling, WP Umbrella is actually thriving. You fully bootstrapped, you grew the company from zero to, I think, almost 2 million ARR in just five years. How much would you say is related to you having a really clearly defined customer profile from the beginning?

Aurelio: It’s 100%. And I think it’s important to have what people call a product market fit. So you have a product and you have a price, and it works. And going back to the pricing discussion, I think it’s very important to be fair and transparent. If you are fair with people, they agree to pay the price. And we’ve never increased our pricing in five years. Our storage costs have grown. We are offering much more value, but we have a kind of transparency and fairness agreement with people. And I think this is why we also don’t have any churn. If you are happy with the product and you know that the company is not going to screw you at some point, and you don’t consider other alternatives, which is also something important. On our growth, I think there is something that needs to be stated, because it’s also important. And I don’t want to give the wrong message about, oh, WordPress is growing so big. The truth is that almost all our users are coming from competitors. They are coming from lifetime MainWP licensees. They are legacy users from ManageWP. So it’s not like we are growing as the agency segment is growing. It’s just that we are taking users from all our competitors, which is slightly different.

Sandra: Right. I’d like to hear your thoughts on the ICP focus, because that’s something that we also are very convinced of: if you really know who your ideal customer is and you optimize everything for that particular customer group, that’s the best basis to really scale a company. And I think that’s not just applicable for pricing and these kinds of things, but also for features. If you know who your ideal customer is, you can actually focus on the features as well, and not just add anything that somebody asks for. But really focus on the features that solve a concrete pain for your ideal customer profile. I think that’s something that WP Umbrella is also doing right.

Aurelio: This is such a no-brainer for me. If you don’t have a clear ICP, you cannot have a company. It’s not like, should we have a clear ICP? For me, if you don’t have an ICP, there is no point. And actually, you never go deep enough into your ICP. We are perfect for agencies, right? There are agencies that are managing 20 sites, and last week we had an agency that moved more than 1000 sites under WP Umbrella. And you have to ask yourself for whom my tool should be working best, because if it’s just one guy with 1000 websites, and on the other hand I have like 3 or 4000 clients that have those 20 websites, I should probably try to prioritize the smaller agencies with 20 sites, right? [Note: Aurelio appears to correct himself later that they actually prioritize larger clients] But that’s not what we are doing. It was to give a clear example. So what we do is we try to get people that are managing more than 200, 300 websites and we fix their pain points. When we get a feature request from a guy who wants, for instance, it came a lot like, hey, I want to get an email with some data available to my WordPress sites. As soon as you manage more than 50 websites, which is going to get a huge amount of data, you just automate everything. So ICP is everything. And inside your ICP, you need to understand your true ICP. And this is tied to your vision of your product, who you want to serve, and so on.

Sandra: Katie, I’d love to hear your thoughts on that, because that’s one thing to do for one platform or one product. But you sell a bunch of small products, a bunch of plugins. How do you handle that?

Katie: Yeah, it’s a weird one for us. People think of us as a WooCommerce company, but our biggest product is actually not WooCommerce. It’s Document Library Pro. And earlier this year, we did a huge analysis of our top plugins and exactly who was using them. We’re actually surprised with the outcome. For example, we discovered that more than 40% of Document Library Pro’s users are nonprofit. We had no idea. We’ve been selling this plugin for five years. It’s our biggest product by a long, long way. We didn’t even know that it targets nonprofits. Then you’ve got things like healthcare, education, that sort of thing. So a very specific ICP, which we did not plan and we were not aware of. Clear opportunity in our marketing. And we’ve made a lot of decisions as a result of discovering this. For example, just this weekend I’ve launched a new product, which is a hosted SaaS version of Document Library Pro that you can embed in any platform. So beyond just WordPress. And that’s because now I know the ICP, I know that a lot of these sites are not on WordPress. They might use other CMS, they might use something completely bespoke. And so the fact that we were just WordPress was really limiting our ability to reach these people that would benefit from the product. So looking back, I can’t believe I went for so long without knowing. So you don’t have to choose your ICP necessarily. You could, if you’ve already got an established product, do that analysis and create it retrospectively, and then think, is your marketing appropriate? Is your targeting appropriate? How can you do everything better with that in mind?

Sandra: And you should probably also do that regularly. I like that example of yours that you kind of discovered that in retrospect, but it can also change with your product developing. And that’s also something that happened to us, for example, at Greyd. At the beginning, we also went in quite broad and kind of targeted a lot of different target groups, but it turned out that more and more of our customers were using us for very specific use cases. All those multi-location, multi-website kind of cases. And that developed slightly in that direction, and now we did the same thing. We did a lot of analysis. We talked to a lot of customers to hear about why they’re using our product, what the most important features for them are, what the most important values are that they are getting from the product. And then we were able to adapt the entire marketing copy and the entire targeting process specific to that customer group. And now we’re also able to focus feature-wise, with a much bigger focus on the features that are relevant for exactly these kinds of use cases. In general, I’d love to hear from both Katie and Aurelio. As I said, you’re both very transparent on your numbers. Aurelio, for example, you share monthly updates on how things are going. Katie, you’re sharing all your thoughts and strategic moves. Is it just a deliberate strategy to build trust, or what’s the reason behind that? Do you want to start, Katie?

Katie: Okay, for me, it was never a deliberate strategy. It was more like, why wouldn’t you? I think I feel a little bit protected because I have so many products. Like I just told you, Document Library Pro is my biggest. I didn’t tell you the revenue. You know the total revenue, you don’t know the per-product revenue. So I think that protects us a bit from competitors. Compared to if you were just a one-product company, maybe by telling the world how big that product is, other people would think, oh, that’s a big market. I’ll copy that. I feel a bit protected by that. And with that in mind, I think why not? And it makes people more transparent with me. For example, I was saying earlier that at WordCamp Europe I was just asking everybody how their sales are doing. I kind of feel justified doing that. I feel quite confident with it because I’m open. If I didn’t give that information, it would be a bit weird. But because I’ve told everybody my revenue, I can ask them and they may or may not answer, but it just opens the door to these conversations and helps me give a guest a really good context. So I know that what’s happening isn’t just happening to me and things like that. It just makes everybody learn and grow together.

Aurelio: And what you said about inspiring others to just do what you say is very true. We got copied by so many hosting companies who would try to, you know, this was a number of efforts. And hopefully it’s not, and actually it’s good because it’s growing awareness, the need people have for a tool that controls everything. So for us, it’s actually always good marketing when someone opens a competitor. Surprisingly for us, there are a few things. And the first one is that we are bootstrappers. And when you don’t have money, you have to start somewhere, right? So we did SEO because it was the only thing we could afford. And we were very good at SEO. And then we started to do LinkedIn. But on LinkedIn you need to show useful and valuable content to people, so why not share our journey knowing that our users, they are all entrepreneurs? And the truth is, it’s a bit different because they can start building products. Before it was impossible for an agency to be an agency and a product company, and I think it was very refreshing for people to read what we were going through. Success, failure, what we learned. And it was also a way to be known. And we are still very unknown even in the very little WordPress ecosystem that goes to WordCamp. There are so many people that don’t know us. And last but not least, the trust of the people using ManageWP was damaged very badly after acquisition. Things stopped to evolve. The price didn’t increase, which is something people don’t recognize. But as a ManageWP team, GoDaddy did a pretty good job listing the price, which it was back in the days. And we should acknowledge that the trust was damaged. And what we do is core to the business of agencies. It’s a tool that we are using every day. And many of them have built their processes, their sales processes, SOPs, their SLAs around what ManageWP was offering. And so we needed this extra credibility, this extra trust to convert them. And like you said, why not share with you? What do I have to hide? Because what we are doing is so hard. I mean, being a remote WordPress backup company is the hardest thing you can do. So it’s not going to be copied overnight by anyone. And you shouldn’t, because to be honest, if I knew, I would have done something else. I would have done, I don’t know, like an accounting software or something. Much easier than a tool to manage WordPress sites. So for us, that’s like those three, four reasons. Start somewhere, give value, build trust. And I think there is also a bit of ego into sharing everything and being someone. And it’s funny to go to places and having people you don’t know come to you and thank you for what you are sharing. It’s something I like doing, actually.

Sandra: It’s really interesting to hear. Matt, you can probably relate to that when you speak to a lot of founders. I think a lot of them are kind of hesitant to share actual numbers and to speak about not just the successes, but also the challenges and difficult phases to go through publicly, right?

Matt: It depends. I think a lot of them are more and more emboldened by seeing folks like Katie. Previously, I think the godfather of transparency was Pippin Williamson. It is actually a really young guy. It’s weird calling him a godfather, but early in the WordPress days, he would share his numbers and his pains and struggles and failures, without anybody ever asking. And everybody in the ecosystem learned from him, myself, primarily. And I think that’s what’s great about the WordPress space, is how open we are. And even when we know we’re competing in the same space, sometimes we very often consider each other frenemies instead of competition. I think that all of that is really important to this ecosystem and helpful. There’s a guy in the space I really respect, admire, Ben Pines. He actually was, a long time ago, running content at Elementor. And now he does coaching and fractional work. And he talks a lot about founder-led marketing. And today that type of tactic is really, really valuable. And people are finding that to be really successful for their products when the founder is the face of the product, and they use their expertise to talk about why they build the things that they build. I think that’s a really valuable thing. And more and more founders are finding that to be how they find their own voice. I think the reason why the ones who struggle, the ones who say, yeah, I don’t want to talk about numbers and things like that, it’s usually just because they don’t want to talk on social media at all in the first place. They just are a lot more antisocial folks, or introverted folks who don’t want to be out there as much. For them, I’m usually trying to help them to understand that, okay, well, then you need to get your brand to do that work. And having your brand do that work is a lot harder, because folks don’t resonate as clearly with brands as they do with people. But one way or the other, you got to do that work: either you as a person, as a founder, or get your brand to be out there and telling these stories in meaningful ways.

Aurelio: What we do, because I think you start to do founder-led marketing because, again, it was cheap. Yeah, so we had to start somewhere. Now what we are doing is people-led marketing. So it’s not only me, because this cannot scale. But we share what’s happening inside the company. So we have Doroteja, who is working in the support department, who is now doing movies about it. Boris is sharing stuff in support, and our CTO is sharing technical stuff. And if you work at WP Umbrella right now, you need to be a bit on social. And this is important because AI is a good way to speed up what you’re already doing, right? But everybody should do that. Everybody should step aside, look at what’s going on, look at the resources, look at how they are allocated, and say, hey, why do I need today three people in customer support while my chatbot is getting 60% of the tickets faster and better? And for us at WP Umbrella, the answer was, well no, it’s not, but I have valuable people in my team. And I don’t want to downsize the company. So we also had people alternative jobs. So, for instance, Doroteja started to do movies, Boris is doing some QA engineering stuff, and he’s moving. And you can turn all your employees into superheroes. So let them be. I mean, this is a long stretch from why we went from founder-led to people-led marketing.

Matt: Yeah. But I think it’s important. Katie’s actually been doing a very similar thing. Right, Katie?

Katie: Yeah, absolutely. We had until recently eight support engineers. I take a bit of exception to something Matt said earlier about people that over hired, because we hired from our sales at the time to meet customer needs. So in the first half of 2024, we hired two more people because our sales were growing rapidly. We had no way of knowing that that was going to stop and go decline for the next two years. So I don’t feel we over hired, but we ended up with far too many support people. And sadly, I let two of them go in Q4, which was really difficult. We still don’t need six. They know we don’t need six, but I have done exactly what Aurelio said and tried to use them in many other areas of the company. Two or three of them are doing a lot of marketing. Support people can be great at marketing because they have excellent product knowledge. They’re good communicators and also they’re good writers. So a lot of those skills can go into marketing and also things like testing. They can be good QA testers. I’m training one of them up on MailChimp because that’s always very neglected, because I didn’t like email marketing. And really trying to use them to maintain those jobs for as long as possible. When we don’t need them on support. So yeah, we’re definitely doing that.

Matt: Yeah, I just want to clarify that I really wasn’t talking about teams your size, right? I was from the perspective of like the Liquid Webs, even the Elementors, the folks that have hundreds of employees. They sometimes end up hiring all the time and then realizing too late, because it’s just the default answer to yeah.

Sandra: Katie, I’d like to discuss a little bit more on the product strategy, because you’re doing an interesting thing at the moment. You shared a little bit of that strategy also at PressConf. You’re now diversifying into Shopify. I know it’s still quite early for that. But can you share a little bit on the reasons why you decided to do that, and maybe also share some first insights on how that transition is going?

Katie: Yeah. Well, the trigger was really the WordPress drama. I had always felt WordPress was incredibly stable and a good horse to back. And then when I saw reputational damage be done to WordPress towards the end of 2024, I realized that while I was diversified across many products, my business was 100% WordPress. And if one person could damage its reputation in a way that could potentially affect the user base, and I don’t know if it has, but the fact that I could see that was possible scared me. And so as a mostly WooCommerce company, I thought Shopify is the obvious place to go in terms of expansion, because while we didn’t have any experience in Shopify, we have a lot of e-commerce experience, which is transposable to Shopify. So we decided to start building Shopify apps, and we haven’t really made any money from it yet. But that’s largely because everybody advised me to launch our app for free to get reviews. We’ve literally only gotten paid in May. It’s all very new. And PressConf was really interesting because it kind of consolidated my thinking about the multi-platform thing. I thought about doing this hosted document library trove for ages, but it was a few conversations I had with different people, one of whom was Matt at PressConf, which made me think, nobody wants to host a document library, but people do want document libraries for different platforms. So that could really expand market. So that was an interesting thing that led to that. And in addition, in the last few months, a lot of people within WordPress, again including Matt, but also people like Devin Walker, Justin Ferriman, have written about how you should solve a problem first. Stop thinking of yourself as a WordPress company and instead think about yourself as solving a particular problem for a particular group of people who may be on WordPress, they may be somewhere else. So you need to go where they are. And my work on the document library side of things is very much that. I’m actually also building a Squarespace and a Wix app just to bridge it with my hosted platform. So I’ve got Fable working very hard today, On the last day, it’s free, building with Squarespace and Wix apps. So yeah, it’s all about going to where the customer is. And this isn’t putting WordPress down. WordPress is still the biggest platform by a mile in terms of CMS. It’s about going to where the customer is.

Sandra: Matt, from your perspective, is diversifying across different platforms something that, in theory, every WordPress founder should be thinking about? Does it only make sense once you’ve hit or outgrown a certain niche?

Matt: Yeah, I think the way Katie talked about her specific journey and her specific motivations for going into Shopify and especially doing the hosted Document Library Pro one is exactly the time at which you start to think about getting outside the WordPress space. Another way that I might say it is: stop thinking like a dev. In the WordPress space, so many folks built everything because they were developers, which is great and amazing and scrappy. But if you want to win in the market, you have to think about your customer. That’s what I want to say over and over and over again: chase your customer, chase your customer, chase your customer. And your customer so often doesn’t even know that they are on WordPress. Sometimes, or they don’t even know that they are on Shopify or Squarespace or Wix or whatever. They often don’t know these things. But if you go chasing after what their needs are and how you can help serve more of their needs, then you will build the tool to help them. And it doesn’t matter whether that’s a WordPress tool or a self-hosted tool or a Chrome extension or whatever it might need to be. You’re chasing the customer instead of having a problem that’s trying to find a customer. I think that in so many ways, that’s kind of the WordPress way: let me create a solution and then go find all the problems, or let me create a solution and then chase after a whole bunch of customers who don’t need me. And it just doesn’t work that way anymore. We really have to chase the customer first and have our solutions going after what their needs are. And if that is outside of WordPress, so be it. WordPress is a medium, not a solve, not a solution in and of itself.

Sandra: We’ve also actually discussed different strategies on how to chase new customers quite a bit today. Aurelio, one of the numbers you share regularly is also the churn rate, which for example, I think was down to 1.6%. Is it just due to deliberate retention work that you’re doing, or is this just a byproduct of who and how you sell?

Aurelio: Maybe I’m a bad entrepreneur, that’s, no, no, but maybe a lack of ambition, you know? But we are profitable, and we are more profitable than we will ever need, I think, to be able to phase a team, to pay infrastructure, to pay ourselves. So at the end of the day, I don’t have problems. I only have problems if my users are livid. And we had a whole discussion about this with Katie, I think last week. The priority in development is fixing a bug and making sure that the people we have are happy. But this is also a consequence of being a bootstrapper. Because again, I cannot spend 20. I mean, no, I could, but back in the day, I had not any money to spend on acquisition. So we were obsessed about keeping the paying users we had. And as a matter of fact, we are every month looking for a way to diminish churn. And recently, I realized that I had no dunning campaign, but the one offered by default by Stripe. And so I implemented something, and we killed involuntary churn, which was our main cause of churn. I mean, we diminished it from like 44% of our trial into 2021. [unklar – “2021” könnte auch “2%” oder “2.1%” sein, das Skript ist an dieser Stelle nicht eindeutig] Just with a Customer.io campaigner. And we spent time on that, because in my opinion, if you’re even and profitable, your obsession should be about keeping your people happy. Because our main acquisition channel nowadays is word of mouth. It’s lower than what I wish it could be, that the company is growing month after month. But maybe I lack ambition, you know. But it’s the path we’ve been taking from day one, and it seems to work pretty well.

Sandra: Matt, Katie, are there any other key takeaways from the retention gap Product Talk episode that you think are worth mentioning here as well? Because a lot of product companies actually struggle way more than WP Umbrella to keep their customers.

Katie: Yeah. I think that is incredible. Because websites just stop existing. When I’ve surveyed people that didn’t renew, a lot of them just aren’t on WordPress or WooCommerce anymore. They just don’t exist anymore. So to have such low churn is incredible, given that those things would not be under your control anyway. I know that Matt has a nice story about something they did at Give with the phone calls, that is quite innovative.

Matt: Yeah. I mean, I think in the space, so many folks struggle with churn because they don’t spend time on it, especially the way that Aurelio has. The saying goes that it’s so much easier to keep existing customers than it is to find new ones. And I find that to be very, very true. And I think that’s a big reflection of the success that Aurelio has been experiencing. And we focus super hard on it as well. And just like Katie said, there were lots of legitimate reasons why people had to stop paying us. Like they were a fundraiser, a charity, and our charity doesn’t exist anymore, so we can’t use your plugin anymore. We can’t do a whole lot about that. But any time there was something that we could help prevent, we worked really, really, really hard to try to prevent folks from leaving if they didn’t have to. And like Katie said, we had a small team that when we got acquired by Liquid Web and worked at Stellar, I grew that team by a lot across all of the Stellar brands to work on both of those accidental churn reasons. Honestly, that’s the best place for any brand to start, is like Aurelio said: just focus on the accidental churn, because that’s just money on the table that you’re not doing anything with. It’s actually relatively straightforward to try to recover that revenue. And Stripe alone really doesn’t do a good enough job. So having some sort of manual or human or even automated follow-ups to help folks on that front can bring in some good stability out of the gate. But every single time somebody asks for a refund, we would always say we have a one-question policy. Everybody says no-question policies. We said we had a one-question policy. And it was usually, why, or can we help you? And it was because we needed to know why people were leaving us so that we could fix that problem in one way or another. If it was a competitor issue where the competitor has a better feature, then we needed to figure out how to get parity there. If it was a problem with our team, then we needed to figure out how to fix our team. No matter what the problem was, we needed to know what it was, or else we couldn’t fix anything. So I was particularly dogmatic about trying to get refund reasons or cancellation reasons or churn reasons for every single time that we lost a customer in one way or another. And I can tell you that just by paying attention, we went from a 17% churn rate to a 7% churn rate very, very quickly. And that’s what I maintained across all the Stellar brands. Seven or less.

Aurelio: And about churn, one thing is worth explaining on my side. We have a pay-as-you-go pricing. So, again, being fair and transparent. And we have no commitments. So if you’re an agency and you lose a client, we don’t have churn. The client just removes one website. And we have a little revenue attrition, which is very fair for everybody. Which is also why we’ve never been willing to do packages. And I think this is also why our churn is so low. Because, for instance, this morning, if someone quickly removes, let’s say, 5 or 10 websites, I don’t have this exact number in mind, we send them, hey, what’s happening? Can we help you? Do we have a problem? And this morning, a guy said, no, I’ve just lost like a bunch of clients, and I’m doing the cleanup. Oh, okay. And then we have nothing to worry about because we cannot control that our clients are losing clients.

Matt: Yeah, I think that’s a really important caveat to make really super clear. Your customers are agencies, by and large. And that’s a very specific type of customer. And I love your model where you’re only charging what the agency actually needs and uses. That definitely changes the numbers. If there are plugin shops out there thinking, oh, how can I ever get to a 1.6% churn rate, I don’t think that’s realistic for most normal plugins. Your situation is unique. So I think that’s important context to add.

Sandra: Thank you for that. Guys, I had a bunch more questions prepared for this episode, but we are already way over an hour. So I want to thank all of you for sharing so much advice and experience and your thoughts on these topics. I think we have some very valuable takeaways for our audience today. Is there anything we haven’t covered today that you say this must be mentioned in this episode? Any advice you want to give, or where to start looking at which is the most important thing that people should focus on right now? Is there anything you want to share on that?

Aurelio: We didn’t speak about AI, which is refreshing, to be honest. But yeah, I mean, if you’re already into product, my advice would be: stand back. Look, if you can reallocate your resources, if your users need you, if they don’t, how can you help them? Because what’s for sure is, no matter what we can say about the market, the pricing structure is changing and nobody is really understanding what’s happening. Some people are telling you that Claude is going to kill your business. Some people are growing. And the truth is, you need to stay alert. And I think it’s very important to be adapting and agile. Agile right now.

Katie: Yeah, I totally agree. My advice would be to really analyze what are your products and how do they fit into the new world and the way things are going. It may be they don’t. Some of my products I don’t believe are relevant for the future, and I’m focusing on the ones that hopefully are. Same with your marketing. Think about what channels you’re using and are they the future of marketing? If not, you may need to change direction.

Matt: Yeah, I think my best advice is what I share with most of my coaching clients. However much time and or money you’re spending on marketing right now, it’s not enough. You should probably double it. Most likely. That’s just the nature of the world we’re in right now. Don’t ship that next feature. Instead, talk to your customers a ton more.

Sandra: That’s great advice to end the episode. Thank you very much for that, all three of you. Thank you very much for taking the time. And to all of you out there, see you in the next episode.

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